The Trump administration finalized rules Thursday that would impose new loan limits for postbaccalaureate degree programs, which could limit college access for hundreds of thousands of students and weaken the pipeline for several much-needed health care jobs. Several trade associations quickly announced plans to challenge the law in federal court.
The lawsuit has not yet been filed, but leaders of the American Academy of Physician Associates and the Physician Assistant Education Association say it is expected “soon.” They plan to argue that the law oversteps executive authority and defeats the intent of lawmakers when they created the loan limit framework in the One Big Beautiful Bill Act, which was passed last summer.
A spokesperson for the American Federation of Teachers, one of the largest higher education unions, said the union is considering legal action.
The crux of the case will be which programs have access to how much federal loan money.
OBBBA ended the Grad PLUS program, which allowed graduate students to borrow up to the full cost of attendance. In its place, Congress established new loan caps that would limit “graduate students” to borrowing $20,500 per year or $100,000 in total and “professional students” to borrowing $50,000 per year or $200,000 in total. But it was up to the Department of Education to determine which degree programs fell into each category.
Finally, the department opted for a narrow professional definition, limiting access to 11 degree programs: pharmacy, dentistry, veterinary medicine, chiropractic, law, medicine, optometry, osteopathic medicine, podiatry, theology and clinical psychology. All other degree programs will be considered “degrees.”
Physician assistant groups said in a statement that without PAs in the professional category “will create unnecessary barriers to PA education and undermine efforts to strengthen the health care workforce at a time of growing national demand.”
Despite doubts from a group of high-level policy experts and comments from more than 80,000 students, lawmakers and institutions, the Department of Education has chosen to stick with its existing professional definition.
Under Secretary Nicholas Kent has repeatedly said that keeping the narrow definition is in the best interest of students and taxpayers—the law is intended to lower the cost of college and prevent borrowers from taking on “unmanageable” levels of debt they can’t repay.
But critics argue that most tuition fees are beyond the reach of institutions due to factors such as rising employee wages, declining state funding and rising demands from lenders when it comes to equipment or program length. They are afraid that since there are loan intervals, many students may not be able to finance their education.
Data from the department supports those concerns, showing that about 429,000 borrowers took out $12.3 billion over the annual loan limit in the 2023-24 academic year. That means that if the policy had already gone into effect, in order to remain enrolled those students would have to find a private lender—possibly with a much higher interest rate—to fill the gap. Previous research from outside groups has found that nearly four in 10 borrowers have subprime credit scores or no credit scores at all and can’t get a private loan.
Combined, these barriers can lead to declining enrollment and revenue, forcing some master’s and terminal degree programs to close.
The department’s decision to stand firm on its narrow definition, or the lawsuit challenging that policy, did not surprise top experts. However, many advocacy groups and academic organizations have expressed “deep” disappointment over the ED’s decision to dismiss public concerns.
“This definition will result in fewer students being able to pursue careers in architecture, public health and health management, mental health counseling, naturopathic medicine, occupational and physical therapy, and athletic training, among other fields, especially those working in the health care industry,” said a spokesperson for the Advanced Professional Workforce Alliance, a coalition that opposes loan restrictions. “Although the Department says there is no good judgment in its explanation, it ignores the importance of the programs that are not included that provide the community and the economy.”
Now, lawyers and experts are watching to see if the courts will favor the educational institutions and, if they do, if the decision will come down quickly enough to prevent Trump’s administration from taking effect on July 1. If not, they add, it will be up to Congress to lead any change in the definition.
“It’s a matter of how long it will take for Congress to act on this issue, and beyond that, we’ll have to see what happens in the legislative branch,” said Emmanuel Guillory, senior director of government relations at the American Council on Education.
ED He doesn’t back down
Kent once again stood up, defending the department’s approach to reporters Thursday morning, saying limiting loans is not only legal but also in the best interest of students and taxpayers.
“This is basic economics. If there’s more money in the system, higher education institutions will raise their rates … and that’s exactly what we’ve seen over the last two decades with Grad PLUS,” he said. “We feel that nurses, police officers, firefighters—all these jobs—are qualified people.
A department spokeswoman later added that 71 percent of college graduates with student loans report delaying major life events like buying a home or car because of their loans.
In the department’s response to public comments criticizing the professional definition, policy experts said ED officials were largely dismissive of the concerns raised.
For example, the department acknowledged concerns that students may not be able to get private loans, noting that “these loan restrictions will create a few new costs for students.” But officials added that the department has no discretion to change the statutory loan limits passed by Congress and that it is using the definition passed by lawmakers. (The state statute lists 10 programs as examples of professional degree programs but says the definition includes but is not limited to those listed.)
Officials also said their approach “provides a clearer and more uniform boundary than the approaches suggested by commenters.”
“With these appropriate lending methods, we are putting in place a framework for institutions to live within their means,” added Kent during a call with the media.
Congress Feels Closed
In Congress, lawmakers had mixed reactions.
Rep. Tim Walberg, a Michigan Republican who chairs the Education and Labor Committee, praised the department for taking action, adding that the new law encourages colleges to “deliver real value.”
“The current system often leaves borrowers in a worse position,” he said in a statement on Thursday. “I commend the Trump administration for advancing these reforms and remain committed to strengthening our higher education system so that it delivers real benefits to students, families and taxpayers.”
Meanwhile, Rep. Mike Lawler, a New York Republican, said Within Higher Ed “He fundamentally disagrees[s] with this law,” adding that he is working hard to reverse it. The education initiative ignores the realities facing nurses, physical therapists, physician assistants, and others who need additional education and licenses to serve our communities,” said Lawler. “I will use all tools necessary to get Congress to act.”
Several other bills with similar goals have been introduced by House Democrats, who have strongly criticized the legislation. But action in Congress will be an uphill battle, as Republicans passed legislation early and control both chambers. However, more than a dozen affected groups have reported Within Higher Ed they will continue to push Congress to expand the definition.
“Congress created the law that led to these regulations, and Congress can change the law,” Waded Cruzado, president of the Association of Public and Land-grant Universities, said in a statement.
